Revenue is defined in the Framework for the Preparation and Presentation of Financial Statements (2008) as increase in economic benefits during the accounting period in the form of inflows or enhancements of assets or decrease of liabilities that result in increase in equity, other than those relating to contributions from equity participants.
Revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity. An entity usually determines the amount of revenue arising on a transaction by referring to the agreement between the entity and the buyer or user of the asset (Lam & Lau 2009).
There have few types of revenue recognition such as from sale of goods, the rendering of services and interest, royalties and dividends. Whereas, some of factors need to be considered when determining when revenue should be recognized in measuring the income of a business enterprise (Lam & Lau 2009).

First, the selling price to buyer is fixed or determinable when customer does not have the unilateral right to terminate or cancel the contract and received a cash refund. From the theory, revenue should not be recognized until the refund rights have expired or the specified future events have occurred. However, revenues can be recognized on a pro rata basis if assuming that the amount of refunds can be reliably estimated based on past experience and industry data (Bragg 2010). But, revenue recognition is deferred when the company has lack of ability to estimate reliably.
As an example, if a company sells a membership fee that can be cancelled by customer for a full refund at any time during the membership period, the revenue recognition cannot occur until the end of the contractual period (Bragg 2010). The reason for this position is that there is uncertainty as to whether